Whether your business is a charity, community club, limited company or you’re self-employed, you may be able to claim tax reliefs to reduce your tax liability.  

As the new tax year begins, there are several taxes your business must pay depending on company performance, whether you have employees and what you are selling. 

Read on for our guide to maximising tax reliefs for your business in 2025 and how you can leverage available deductions, grants and incentives.  

 

Understanding Your Tax Obligations  

In Scotland and the UK, businesses must comply with various tax obligations, including those related to digital taxation. It’s important that you understand what your business must pay. Some of the tax obligations you may be applicable for:  

• Limited companies must pay Corporation Tax on profits.  

• Businesses with a taxable turnover above £90,000 must register for Value Added Tax (VAT). 

• Sole traders and partnerships pay Income Tax on profits above the personal allowance (£12,570). Scotland has its own income tax rates and bands for earned income.  

• Employers and individuals who are self-employed must make National Insurance Contributions (NICs) based on their earnings thresholds. 

 

Industry-Specific Tax Reliefs in Scotland 

Often the government releases schemes and grants to help specific industries during times of economic turmoil. For instance, during the Covid-19 pandemic, grant funds were made available to small businesses and the retail, hospitality and leisure industry. 

There are several tax reliefs and funds the government has released for businesses in Scotland to help generate growth and provide support. Some reliefs and grants available in 2025:      

• Enterprise Areas Tax Reliefs 

Businesses setting up in specific sectors or relocating to an Enterprise Area, such as life sciences enterprise areas, low carbon or renewable areas, or general manufacturing and growth sectors may qualify for Enterprise Areas Relief. This relief will continue until 31st March 2026, and you can apply through your local council.  

• Business Growth Accelerator Tax Reliefs 

If your business premises is a new build, or you have to make significant improvements to your property, you may be eligible for Business Growth Accelerator Relief. If you have to expand or make improvements to your property, your non-domestic rates won’t change for 12 months.  

• Charity Tax Reliefs 

Registered charities and community amateur sports clubs can apply for 80% rates relief if their property is mostly used by that club or for charitable purposes. Find out more here.  

• Small Business Bonus Scheme 

You may be eligible for up to 100% non-domestic rates relief through the Small Business Bonus Scheme if the combined rateable value of all your business premises is £35,000 or less, the rateable values of your individual premises are £20,000 or less and the property is actively occupied.  

• Telecommunications Tax Reliefs 

If your business provides new fibre infrastructure for telecommunications, you may be eligible for 100% rates relief. To get this relief the infrastructure must have been installed after 1st April 2019, however it is available until 31st March 2034. 

 

Utilising Tax-Free Employee Benefits 

Tax-efficient employee benefits are a smart way for businesses to reduce tax liabilities while improving employee satisfaction and retention. Only some benefits are tax-deductible so it’s important to choose carefully and structure a compensation package that benefits both your business and your employees. Some tax-deductible benefits include:  

• Pension contributions. Employer pension contribution payments to employee pensions are tax-deductible for the employer and exempt from National Insurance Contributions (NICs). Not to mention, contributions to registered pension schemes reduce taxable profits. 

• Cycle to Work Scheme. The Cycle to Work Scheme provides employees with bikes tax-free, while employers benefit from NIC savings. 

• Private Healthcare. While employees are taxed on private medical insurance as a Benefit in Kind (BIK), employers can claim tax relief. 
• Professional Development and Training. Costs for work-related training and qualifications are fully tax-deductible for employers and tax-free for employees. 
• Workplace Childcare. Businesses can offer subsidies for workplace nurseries, which are tax-deductible.

 

Optimising Business Structure 

Evaluating whether to operate as a sole proprietor or a limited company is critical for minimising tax liabilities and determining the most tax-efficient structure for your business. 

The main difference between the two is that sole traders pay income tax on their business profits, whereas limited companies pay corporation tax. While being a sole trader allows for simplicity and control, it also means that you are personally liable for any debts the business incurs so your house could be at risk. Meanwhile, for a limited company, your personal responsibility is limited to the amount you have invested in the business, so your personal assets are not at risk.  

Each structure has its own tax implications and drawbacks so understanding which is the most advantageous for your business is imperative.  

 

Thinking of Switching to a Chartered Accountant?  

At MMG Chartered Accountants, we are committed to helping you achieve your financial goals and secure a prosperous future. Schedule a consultation or call your local branch today to discover how we can empower you to take control of your financial well-being.